June began with mixed signals: despite the confident growth of technology and industrial leader stocks, the economy continues to face a number of structural problems — a decline in manufacturing activity, a weakening dollar, and intensified trade tensions. In such an environment, investors cautiously restructure their portfolios, focusing on companies with a sustainable business model and closely monitoring changes in trade policy and macroeconomic indicators.
Growth of market leaders: technology giants and defensive assets. American markets entered June with mixed trends: Meta's shares reached a 13-week high, rising to $662.73, gaining over 10% in the last month and nearly 39% over the year. This growth is attributed to strong financial performance and prospects for artificial intelligence product development. Along with Meta, Walt Disney, General Electric, and Walmart are also rising confidently, each showing significant growth in recent weeks. Walmart stands out particularly with an annual return of over 50%, highlighting its role as a defensive asset in conditions of economic uncertainty. This demonstrates the current market trend — investors prefer high-quality, resilient companies in the face of external risks.
Economic challenges: dollar weakness and production cuts. However, the situation in the US economy raises concerns. The US dollar index (DXY) as of June 2 is at 98.7 — the lowest level in the last six weeks — and continues to decline against the backdrop of escalating trade conflicts and weak economic data. The weakening dollar is accompanied by deteriorating industrial production indicators: the ISM Manufacturing PMI index in May fell to 48.5, indicating a third consecutive contraction in the sector. Although the S&P Global PMI index remains above 50, it shows a slowdown in growth. Reports indicate a decline in new orders, employment, and export shipments, indicating ongoing problems in supply chains and logistics.
Weakness in the construction sector and the impact of tariffs. The construction sector also shows weak results: expenditures in April decreased by 0.4%, with private investments falling by 0.7%, especially in residential real estate construction. Only the public sector showed positive growth, including commercial and medical facilities. The rising costs of imported materials due to tariffs further restrain the development of the industry.
Trade tensions are a key factor of instability. The main factor of instability is the escalation of trade disputes. The US administration is raising tariffs on steel and aluminum to 50%, while China and the European Union are preparing retaliatory measures. The intensification of trade rhetoric and real actions cause an increase in uncertainty, especially among manufacturers who are unable to quickly adapt to new conditions. This creates additional pressure on the economy and undermines business confidence.
The government bond market as an indicator of expectations. In such a situation, investors closely monitor the government bond market: the yield on 10-year Treasury bonds remains at 4.42%, reflecting caution and anticipation of important economic data, including the employment report. If indicators worsen, the market may react sharply, increasing volatility and pressure on the dollar.
Connection to the cryptocurrency market: dollar weakness and new risks. The decline of the dollar index and escalating trade tensions create additional influencing factors on the cryptocurrency market. Traditionally, a weaker dollar is seen as positive for cryptocurrencies, especially for bitcoin and ether, as they serve as alternative assets and hedges against inflation risks. In the current conditions of uncertainty, many investors view cryptocurrencies as a way to diversify their portfolios and protect capital from currency and trade risks. However, increased regulation and overall market volatility maintain a high level of risk and require caution in making investment decisions.
The overall picture of the market: a balance between growth and challenges. As a result, the picture in the American market now combines the confident growth of leaders and problems in the fundamental economy. Trade conflicts, slowing production, and the weakness of the dollar create challenges that require flexibility and careful analysis from investors. In such a situation, it is important to focus on resilient companies and closely monitor the political and macroeconomic trends that continue to shape the market, as well as consider the role of cryptocurrencies as a hedging tool in conditions of increased volatility and geopolitical uncertainty.
